A Lesson Is Offered By One University CU
IOWA CITY, Iowa-It may be called University of Iowa Community Credit Union, but according to CEO Jeff Disterhoft, the focus is more on the latter part of the name than the former.
The 81,000-member, $1.18-billion institution was a single-sponsor CU from its founding in 1938 until converting to a community charter in 1987. Disterhoft said that while the UICCU still serves the university community, the FOM expansion was part of an effort to remove some of the risk inherent in serving a single sponsor.
Today, he said, "I think 65% or so of our membership is not affiliated with the University of Iowa, so it's been a great way for us to diversify our book of business and remain vibrant, regardless of what does or does not happen at the university."
Discussing the evolution of fields of membership-both at his own CU and in the movement as a whole-Disterhoft believes that, "For most credit unions, I think they'll find life to be a little easier once they matriculate beyond a single sponsor, if only because there's just a bigger pool to go swimming in."
Plus, he added, other credit unions will find it reduces risk, as it did at UICCU, and the more diverse membership can often lead to a wider variety of business opportunities for the institution. "It can be a daunting and expensive endeavor to jump into that pool, but once you get used to the water, life can be a little bit better."
Nevertheless, Disterhoft noted that UICCU is a growth-focused credit union, and "for many credit unions, growth is not the end objective."
There will always be space in the market for single-sponsor credit unions, he posited, and "perhaps it's just making sure that they take excellent care of their sponsor group, and that's perfectly fine. If that's your objective, then there's no reason whatsoever that a SEG-based model couldn't and wouldn't work. It all depends on what your focus is."